Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A factory polluting a river
B
A homeowner planting a garden that beautifies the neighborhood
C
A company laying off employees
D
A drug dealer selling illegal substances
Understanding the Answer
Let's break down why this is correct
Answer
A positive externality occurs when an action by one person or company benefits others without them paying for it. For example, if a farmer plants a beautiful garden of flowers, not only does he enjoy the view, but neighbors and passersby also get to enjoy the beauty without any cost. This makes the area more attractive and can even increase property values nearby. In this case, the farmer's action creates a benefit for the community, demonstrating how positive externalities work in economics. Such benefits can lead to more people wanting to invest in and improve their surroundings, creating a ripple effect of positive change.
Detailed Explanation
When a homeowner plants a garden, it makes the neighborhood look nicer. Other options are incorrect because Some might think pollution helps by creating jobs; People might think layoffs can help a company save money.
Key Concepts
positive externalities
Topic
Externality Graphs in Economics
Difficulty
easy level question
Cognitive Level
understand
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